STAGWELL INC. (NASDAQ: STGW) REPORTS RESULTS FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2024
Q4 YoY Revenue Growth of 20%, With 22% Growth in Digital Transformation
Q4 YoY Net Revenue Growth of 14%, Organic Net Revenue Growth of 10%, Digital Transformation Net Revenue Growth of 15%
Q4 Net Income Attributable to Stagwell Inc. Common Shareholders of $3 million
Q4 Adjusted EBITDA of $123 million; Adjusted EBITDA Margin of 20%
Q4 EPS of $0.03; Adjusted EPS of $0.24
Eighth Consecutive Quarter of Record LTM Net New Business
Net New Business of $102 million in Q4; LTM Net New Business of $382 million
Introduce Guidance for 2025 of Total Net Revenue Growth of ~8%; Adjusted EBITDA of $410 million to $460 million; Free Cash Flow Conversion in excess of 45%
Stagwell To Host Investor Day on April 2nd 2025
NEW YORK, Feb. 27, 2025 /PRNewswire/ -- (NASDAQ: STGW) - Stagwell Inc. ("Stagwell") today announced financial results for the quarter and year ended December 31, 2024.
FOURTH QUARTER RESULTS:
-- Q4 Revenue of $789 million, an increase of 20% versus the prior year
period; Full Year Revenue of $2.8 billion, an increase of 12% versus the
prior year
-- Q4 Net Revenue of $630 million, an increase of 14% versus the prior year
period; Full Year Net Revenue of $2.3 billion, an increase of 7% versus
the prior year
-- Q4 Organic Net Revenue increased 10% versus the prior year period; Full
Year Organic Net Revenue increased 5% versus the prior year
-- Q4 Net Income attributable to Stagwell Inc. Common Shareholders of $3
million versus $1 million in the prior year period; Full Year Net Income
attributable to Stagwell Inc. Common Shareholders of $2 million versus
$0.1 million in the prior year
-- Q4 Adjusted EBITDA of $123 million, an increase of 30% versus the prior
year period; Full Year Adjusted EBITDA of $411 million, an increase of
14% versus the prior year
-- Q4 Adjusted EBITDA Margin of 20% on net revenue; Full Year Adjusted
EBITDA Margin of 18% on net revenue
-- Q4 Earnings Per Share Attributable to Stagwell Inc. Common Shareholders
of $0.03 versus $0.00 in the prior year period; Full Year Earnings Per
Share Attributable to Stagwell Inc. Common Shareholders of $0.02 versus
$0.00 in the prior year
-- Q4 Adjusted Earnings Per Share attributable to Stagwell Inc. Common
Shareholders of $0.24 versus $0.12 in the prior year period; Full Year
Adjusted Earnings Per Share attributable to Stagwell Inc. Common
Shareholders of $0.77 versus $0.57 in the prior year
-- Net new business of $102 million in the fourth quarter, last
twelve-month net new business of $382 million
See "Non-GAAP Financial Measures" below for explanations and reconciliations of the Company's non-GAAP financial measures.
Mark Penn, Chairman and CEO of Stagwell, said, "2024 was a breakthrough year for Stagwell and has fueled a strong start to 2025. We re-established ourselves as the fastest growing business in the industry, accelerated rapidly in Digital Transformation, took advantage of an unprecedented U.S. election cycle, and made strategic investments to expand our capabilities and geographical reach. I'm looking forward to a strong 2025."
Frank Lanuto, Chief Financial Officer, commented: "Stagwell posted strong results in the fourth quarter with double-digit revenue growth in 4 of our 5 principal capabilities. We delivered fourth quarter revenue of $789 million. Simultaneously, we grew our adjusted EBITDA to $123 million, representing a 20% margin on net revenue, an improvement of approximately 230 bps over the prior year period, as we lowered our comp to revenue ratio to 57.5%, a company record. These results give us confidence in the year ahead."
Financial Outlook
2025 financial guidance is announced as follows:
-- Total Net Revenue growth of approximately 8%
-- Adjusted EBITDA of $410 million to $460 million
-- Free Cash Flow Conversion in excess of 45%
-- Adjusted EPS of $0.75 - $0.88
-- Guidance includes anticipated impact from acquisitions or dispositions.
* The Company has excluded a quantitative reconciliation with respect to the Company's 2025 guidance under the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K. See "Non-GAAP Financial Measures" below for additional information.
Video Webcast
Management will host a video webcast on Thursday, February 27, 2025, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the quarter and year ended December 31, 2024. The video webcast will be accessible at https://bit.ly/3EVAIAk. An investor presentation has been posted on our website at www.stagwellglobal.com and may be referred to during the webcast.
A recording of the webcast will be accessible one hour after the webcast and available for ninety days at www.stagwellglobal.com.
Stagwell Inc.
Stagwell is the challenger network built to transform marketing. We deliver scaled creative performance for the world's most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing. Led by entrepreneurs, our specialists in 40+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.
Contacts
For Investors:
Ben Allanson
IR@stagwellglobal.com
For Press:
Beth Sidhu
PR@stagwellglobal.com
Non-GAAP Financial Measures
In addition to its reported results, Stagwell Inc. has included in this earnings release certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures." Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company's results. Such non-GAAP financial measures include the following:
(1) Organic Net Revenue: "Organic net revenue growth" and "Organic net revenue decline" reflects the year-over-year change in the Company's reported net revenue attributable to the Company's management of the entities it owns. We calculate organic net revenue growth (decline) by subtracting the net impact of acquisitions (divestitures) and the impact of foreign currency exchange fluctuations from the aggregate year-over-year increase or decrease in the Company's reported net revenue. The net impact of acquisitions (divestitures) reflects the year-over-year change in the Company's reported net revenue attributable to the impact of all individual entities that were acquired or divested in the current and prior year. We calculate impact of an acquisition as follows: (a) for an entity acquired during the current year, we present the entity's prior year net revenue for the same period during which we owned it in the current year as impact of the acquisition in the current year; and (b) for an entity acquired in the prior year, we present the entity's prior year net revenue for the period during which we did not own the entity in the prior year as impact of the acquisition in the current year. We calculate impact of a divestiture as follows: (a) for a divestiture in the current year, we present the entity's prior year net revenue for the same period during which we no longer owned it in the current year as impact of the divestiture in the current year; and (b) for a divestiture in the prior year, we present the entity's prior year net revenue for the period during which we owned it in the prior year as impact of the divestiture in the current year. We calculate the impact of any acquisition or divestiture without adjusting for foreign currency exchange fluctuations. The impact of foreign currency exchange fluctuations reflects the year-over-year change in the Company's reported net revenue attributable to changes in foreign currency exchange rates. We calculate the impact of foreign currency exchange fluctuations for the portion of the reporting period in which we recognized revenue from a foreign entity in both the current year and the prior year. The impact is calculated as the difference between (1) reported prior period net revenue (converted to U.S. dollars at historical foreign currency exchange rates) and (2) prior period net revenue converted to U.S. dollars at current period foreign exchange rates.
(2) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.
(3) Adjusted EBITDA: defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items.
(4) Adjusted Diluted EPS is defined as (i) Net income (loss) attributable to Stagwell Inc. common shareholders, plus net income attributable to Class C shareholders, excluding amortization expense, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items, divided by (ii) (a) the per weighted average number of common shares outstanding plus (b) the weighted average number of Class C shares outstanding, (if dilutive). Other items includes restructuring costs, acquisition-related expenses, and non-recurring items, and subject to the anti-dilution rules.
(5) Free Cash Flow: defined as Adjusted EBITDA less capital expenditures, change in net working capital, cash taxes, interest, and distributions to minority interests, but excludes contingent M&A payments. Free Cash Flow Conversion is the percentage of adjusted EBITDA.
Included in this earnings release are tables reconciling reported Stagwell Inc. results to arrive at certain of these non-GAAP financial measures.
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company's representatives may also make forward-looking statements orally or in writing from time to time. Statements in this document that are not historical facts, including, statements about the Company's beliefs and expectations, future financial performance, growth, and future prospects, the Company's strategy, business and economic trends and growth, technological leadership and differentiation, potential and completed acquisitions, anticipated and actual operating efficiencies and synergies and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Forward-looking statements, which are generally denoted by words such as "ability," "aim," "anticipate," "assume," "believe," "build," "consider," "continue," "could," "create," "develop," "drive," "estimate," "expect," "focus," "forecast," "foresee," "future," "goal," "guidance," "in development," "intend," "likely," "look," "maintain," "may," "ongoing," "opportunity," "outlook," "plan," "possible," "potential," "predict," "probable," "project," "should," "target," "will," "would" or the negative of such terms or other variations thereof and terms of similar substance used in connection with any discussion of current plans, estimates and projections are subject to change based on a number of factors, including those outlined in this section.
Forward-looking statements in this document are based on certain key expectations and assumptions made by the Company. Although the management of the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. The material assumptions upon which such forward-looking statements are based include, among others, assumptions with respect to general business, economic and market conditions, the competitive environment, anticipated and unanticipated tax consequences and anticipated and unanticipated costs. These forward-looking statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company's control. Therefore, you should not place undue reliance on such statements. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.
Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:
-- risks associated with international, national and regional unfavorable
economic conditions that could affect the Company or its clients;
-- demand for the Company's services, which may precipitate or exacerbate
other risks and uncertainties;
-- inflation and actions taken by central banks to counter inflation;
-- the Company's ability to attract new clients and retain existing
clients;
-- the impact of a reduction in client spending and changes in client
advertising, marketing and corporate communications requirements;
-- financial failure of the Company's clients;
-- the Company's ability to retain and attract key employees;
-- the Company's ability to compete in the markets in which it operates;
-- the Company's ability to achieve its cost saving initiatives;
-- the Company's implementation of strategic initiatives;
-- the Company's ability to remain in compliance with its debt agreements
and the Company's ability to finance its contingent payment obligations
when due and payable, including but not limited to those relating to
redeemable noncontrolling interests and deferred acquisition
consideration;
-- the Company's ability to manage its growth effectively;
-- the Company's ability to identify and complete acquisitions or other
strategic transactions that complement and expand the Company's business
capabilities and successfully integrate newly acquired businesses into
the Company's operations, retain key employees, and realize expected
cost savings, synergies and other related anticipated benefits within
the expected time period;
-- the Company's ability to identify and complete divestitures and to
achieve the anticipated benefits therefrom;
-- the Company's ability to develop products incorporating new
technologies, including augmented reality, artificial intelligence, and
virtual reality, and realize benefits from such products;
-- the Company's use of artificial intelligence, including generative
artificial intelligence;
-- adverse tax consequences for the Company, its operations and its
stockholders, that may differ from the expectations of the Company,
including that future changes in tax laws, potential increases to
corporate tax rates in the United States and disagreements with tax
authorities on the Company's determinations that may result in increased
tax costs;
-- adverse tax consequences in connection with the business combination
that formed the Company in August 2021, including the incurrence of
material Canadian federal income tax (including material "emigration
tax");
-- the Company's ability to establish and maintain an effective system of
internal control over financial reporting, including the risk that the
Company's internal controls will fail to detect misstatements in its
financial statements;
-- the Company's ability to accurately forecast its future financial
performance and provide accurate guidance;
-- the Company's ability to protect client data from security incidents or
cyberattacks;
-- economic disruptions resulting from war and other geopolitical tensions
(such as the ongoing military conflicts between Russia and Ukraine and
in the Middle East), terrorist activities, natural disasters, and public
health events;
-- stock price volatility; and
-- foreign currency fluctuations.
Investors should carefully consider these risk factors, other risk factors described herein, and the additional risk factors outlined in more detail in our 2023 Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on March 11, 2024, and accessible on the SEC's website at www.sec.gov, under the caption "Risk Factors," and in the Company's other SEC filings.
SCHEDULE 1
STAGWELL INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
2024 2023 2024 2023
Revenue $788,708 $654,895 $2,841,216 $2,527,177
Operating Expenses
Cost of services 502,522 419,865 1,842,978 1,621,174
Office and general expenses 203,887 179,871 711,803 661,250
Depreciation and amortization 38,771 35,036 151,652 142,831
Impairment and other losses - 833 1,715 11,395
745,180 635,605 2,708,148 2,436,650
Operating Income 43,528 19,290 133,068 90,527
Other income (expenses):
Interest expense, net (24,038) (22,889) (92,317) (90,644)
Foreign exchange, net 645 (672) (1,656) (2,960)
Gain on sale of business - 94,505 94,505
Other, net (547) 108 (1,372) (359)
(23,940) 71,052 (95,345) 542
Income before income taxes and equity in earnings of non-consolidated affiliates 19,588 90,342 37,723 91,069
Income tax expense 3,741 35,560 13,182 40,557
Income before equity in earnings of non-consolidated affiliates 15,847 54,782 24,541 50,512
Equity in income (loss) of non-consolidated affiliates - (8,423) 503 (8,870)
Net income 15,847 46,359 25,044 41,642
Net income attributable to noncontrolling and redeemable noncontrolling interests (12,612) (45,073) (22,785) (41,508)
Net income attributable to Stagwell Inc. common shareholders $3,235 $1,286 $2,259 $134
Earnings Per Common Share:
Basic $0.03 $0.01 $0.02
$ -
Diluted $0.03
$ - $0.02
$ -
Weighted Average Number of Common Shares Outstanding:
Basic 109,266 112,769 110,890 117,259
Diluted 115,147 119,621 115,752 122,170
SCHEDULE 2
STAGWELL INC.
UNAUDITED COMPONENTS OF NET REVENUE CHANGE
(amounts in thousands)
Net Revenue -Components of Change Change
Three Months Foreign Net Organic Total Change Three Months Organic Total
Ended Currency Acquisitions Ended
December 31, (Divestitures) December 31,
2023 2024
Integrated Agencies Network $302,137 $25 $4,800 $27,405 $32,230 $334,367 9.1 % 10.7 %
Brand Performance Network 168,519 75 6,046 6,121 174,640 3.6 % 3.6 %
Communications Network 68,229 42 15,757 23,666 39,465 107,694 34.7 % 57.8 %
All Other 12,181 (161) 2,950 (2,048) 741 12,922 (16.8) % 6.1 %
$551,066 $(19) $23,507 $55,069 $78,557 $629,623 10.0 % 14.3 %
Net Revenue -Components of Change Change
Year Ended Foreign Net Organic Total Change Year Ended Organic Total
December 31, Currency Acquisitions December 31,
2023 (Divestitures) 2024
Integrated Agencies Network $1,232,798 $226 $7,208 $32,521 $39,955 $1,272,753 2.6 % 3.2 %
Brand Performance Network 627,810 2,220 2,252 18,948 $23,420 651,230 3.0 % 3.7 %
Communications Network 245,261 (28) 22,177 $66,385 $88,534 333,795 27.1 % 36.1 %
All Other 46,585 (984) (609) (6,108) (7,701) 38,884 (13.1) % (16.5) %
$2,152,454 $1,434 $31,028 $111,746 $144,208 $2,296,662 5.2 % 6.7 %
(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.
Note: The Company made changes to its internal management and reporting structure in the first quarter of 2024, resulting in a change to its reportable segments (Networks). Specifically, certain agencies previously within the Brand Performance Network are now in the Integrated Agencies Network. Periods presented prior to the first quarter of 2024 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.
SCHEDULE 3
STAGWELL INC.
UNAUDITED SEGMENT OPERATING RESULTS
(amounts in thousands)
For the Three Months Ended December 31, 2024
Integrated Brand Communications All Other Corporate Total
Agencies Performance Network
Network Network
Net Revenue $334,367 $174,640 $107,694 $12,922
$ - $629,623
Billable costs 73,558 13,688 72,150 (311) 159,085
Revenue 407,925 188,328 179,844 12,611 788,708
Billable costs 73,558 13,688 72,150 (311) 159,085
Staff costs 212,062 100,890 54,590 10,364 12,315 390,221
Administrative costs 32,857 23,959 10,940 2,692 5,006 75,454
Unbillable and other costs, net 16,455 19,224 965 4,105 40,749
Adjusted EBITDA (1) 72,993 30,567 41,199 (4,239) (17,321) 123,199
Stock-based compensation 2,083 1,989 643 175 8,345 13,235
Depreciation and amortization 19,345 8,071 5,119 2,780 3,456 38,771
Deferred acquisition consideration 7,600 (1,290) 9,673 (938) 15,045
Other items, net (1) 7,388 3,173 1,146 185 728 12,620
Operating income (loss) $36,577 $18,624 $24,618 $(6,441) $(29,850) $43,528
(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.
SCHEDULE 4
STAGWELL INC.
UNAUDITED SEGMENT OPERATING RESULTS
(amounts in thousands)
For the Year Ended December 31, 2024
Integrated Brand Communications All Other Corporate Total
Agencies Performance Network
Network Network
Net Revenue $1,272,753 $651,230 $333,795 $38,884
$ - $2,296,662
Billable costs 262,692 100,654 181,345 (137) 544,554
Revenue 1,535,445 751,884 515,140 38,747 2,841,216
Billable costs 262,692 100,654 181,345 (137) 544,554
Staff costs 792,041 397,301 177,629 34,999 47,736 1,449,706
Administrative costs 128,954 93,155 37,057 6,139 16,402 281,707
Unbillable and other costs, net 72,756 65,901 2,235 13,570 154,462
Adjusted EBITDA (1) 279,002 94,873 116,874 (15,824) (64,138) 410,787
Stock-based compensation 27,253 6,977 3,374 904 13,653 52,161
Depreciation and amortization 78,076 34,595 14,126 12,718 12,137 151,652
Deferred acquisition consideration 13,290 (7,744) 18,770 (1,321) 22,995
Impairment and other losses 1,500 215 1,715
Other items, net (1) 20,592 19,536 3,250 887 4,931 49,196
Operating income (loss) $138,291 $41,509 $77,354 $(29,012) $(95,074) $133,068
(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.
SCHEDULE 5
STAGWELL INC.
UNAUDITED SEGMENT OPERATING RESULTS
(amounts in thousands)
For the Three Months Ended December 31, 2023
Integrated Brand Communications All Other Corporate Total
Agencies Performance Network
Network Network
Net Revenue $302,137 $168,519 $68,229 $12,181
$ - $551,066
Billable costs 51,665 16,921 35,217 26 103,829
Revenue 353,802 185,440 103,446 12,207 654,895
Billable costs 51,665 16,921 35,217 26 103,829
Staff costs 195,953 97,871 43,319 6,292 11,088 354,523
Administrative costs 29,618 23,174 8,568 3,445 (1,871) 62,934
Unbillable and other costs, net 18,111 17,357 277 2,885 38,630
Adjusted EBITDA (1) 58,456 30,117 16,065 (441) (9,217) 94,980
Stock-based compensation 12,015 2,364 1,157 91 6,937 22,564
Depreciation and amortization 19,680 8,090 2,800 2,238 2,228 35,036
Deferred acquisition consideration 3,813 1,739 (3,373) 2,179
Impairment and other losses 737 96 833
Other items, net (1) 6,403 3,713 198 95 4,669 15,078
Operating income (loss) $15,808 $14,115 $15,283 $(2,865) $(23,051) $19,290
(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items.
Note: The Company made changes to its internal management and reporting structure in the first quarter of 2024, resulting in a change to its reportable segments (Networks). Specifically, certain agencies previously within the Brand Performance Network are now in the Integrated Agencies Network. Periods presented prior to the first quarter of 2024 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.
SCHEDULE 6
STAGWELL INC.
UNAUDITED SEGMENT OPERATING RESULTS
(amounts in thousands)
For the Year Ended December 31, 2023
Integrated Brand Communications All Other Corporate Total
Agencies Performance Network
Network Network
Net Revenue $1,232,798 $627,810 $245,261 $46,585
$ - $2,152,454
Billable costs 185,913 100,364 88,446 374,723
Revenue 1,418,711 728,174 333,707 46,585 2,527,177
Billable costs 185,913 100,364 88,446 374,723
Staff costs 768,846 386,803 159,165 37,416 36,938 1,389,168
Administrative costs 122,618 87,337 33,664 4,689 11,472 259,780
Unbillable and other costs, net 71,776 55,891 613 15,087 143,367
Adjusted EBITDA (1) 269,558 97,779 51,819 (10,607) (48,410) 360,139
Stock-based compensation 27,485 6,204 3,334 518 19,638 57,179
Depreciation and amortization 81,957 33,250 11,016 8,390 8,218 142,831
Deferred acquisition consideration 11,931 2,851 30 (1,752) 13,060
Impairment and other losses 11,299 96 11,395
Other items, net (1) 20,225 12,206 1,535 1,174 10,007 45,147
Operating income (loss) $116,661 $43,172 $35,904 $(18,937) $(86,273) $90,527
(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.
Note: The Company made changes to its internal management and reporting structure in the first quarter of 2024, resulting in a change to its reportable segments (Networks). Specifically, certain agencies previously within the Brand Performance Network are now in the Integrated Agencies Network. Periods presented prior to the first quarter of 2024 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.
SCHEDULE 7
STAGWELL INC.
UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)
(amounts in thousands, except per share amounts)
For the Three Months Ended December 31, 2024
GAAP Adjustments Non-GAAP
Net income attributable to Stagwell Inc. common shareholders $3,235 $22,226 $25,461
Net income attributable to Class C shareholders 40,500 40,500
Net income attributable to Stagwell Inc. and Class C shareholders and adjusted net income $3,235 $62,726 $65,961
Weighted average number of common shares outstanding 115,147 2,567 117,714
Weighted average number of common Class C shares outstanding 151,649 151,649
Weighted average number of shares outstanding 115,147 154,216 269,363
Diluted EPS and Adjusted Diluted EPS (1) $0.03 $0.24
Adjustments to Net income
Amortization $30,572
Stock-based compensation 13,235
Deferred acquisition consideration 15,045
Other items, net 12,620
71,472
Adjusted tax expense (20,040)
51,432
Net income attributable to Class C shareholders 11,294
$62,726
Allocation of adjustments to Net income
---
Net income attributable to Stagwell Inc. common shareholders - add-backs $22,226
Net income attributable to Class C shareholders - add-backs 29,206
Net income attributable to Class C shareholders 11,294
40,500
$62,726
(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
SCHEDULE 8
STAGWELL INC.
UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)
(amounts in thousands, except per share amounts)
For the Year Ended December 31, 2024
GAAP Adjustments Non-GAAP
Net income attributable to Stagwell Inc. common shareholders $2,259 $80,403 $82,662
Net income attributable to Class C shareholders 123,942 123,942
Net income attributable to Stagwell Inc. and Class C and adjusted net income $2,259 $204,345 $206,604
Weighted average number of common shares outstanding 115,752 2,234 117,986
Weighted average number of common Class C shares outstanding 151,649 151,649
Weighted average number of shares outstanding 115,752 153,883 269,635
Diluted EPS and Adjusted Diluted EPS (1) $0.02 $0.77
Adjustments to Net Income
Amortization $122,442
Impairment and other losses 1,715
Stock-based compensation 52,161
Deferred acquisition consideration 22,995
Other items, net 49,196
248,509
Adjusted tax expense (61,308)
187,201
Net income attributable to Class C shareholders 17,144
$204,345
Allocation of adjustments to Net income
Net income attributable to Stagwell Inc. common shareholders - add-backs $80,403
Net income attributable to Class C shareholders - add-backs 106,798
Net income attributable to Class C shareholders 17,144
123,942
$204,345
(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
SCHEDULE 9
STAGWELL INC.
UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)
(amounts in thousands, except per share amounts)
For the Three Months Ended December 31, 2023
GAAP Adjustments Non-GAAP
Net income (loss) attributable to Stagwell Inc. common shareholders $127 $(4,705) $(4,578)
Net income attributable to Class C shareholders 35,780 35,780
Net income attributable to Stagwell Inc. and Class C and adjusted net income $127 $31,075 $31,202
Weighted average number of common shares outstanding 119,621 119,621
Weighted average number of common Class C shares outstanding 151,649 151,649
Weighted average number of shares outstanding 119,621 151,649 271,270
Diluted EPS and Adjusted Diluted EPS (1)
$ - $0.12
Adjustments to Net income (loss)
Amortization $27,231
Impairment and other losses 833
Stock-based compensation 22,564
Deferred acquisition consideration 3,338
Gain on sale of business (94,505)
Other items, net 15,078
(25,461)
Adjusted tax expense 14,768
(10,693)
Net income attributable to Class C shareholders 41,768
$31,075
Allocation of adjustments to Net income (loss)
---
Net loss attributable to Stagwell Inc. common shareholders - add-backs $(4,705)
Net loss attributable to Class C shareholders - add-backs (5,988)
Net income attributable to Class C shareholders 41,768
35,780
$31,075
(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
SCHEDULE 10
STAGWELL INC.
UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)
(amounts in thousands, except per share amounts)
For the Year Ended December 31, 2023
GAAP Adjustments Non-GAAP
Net income attributable to Stagwell Inc. common shareholders $134 $52,712 $52,846
Net income attributable to Class C shareholders 106,153 106,153
Net income attributable to Stagwell Inc. and Class C and adjusted net income $134 $158,865 $158,999
Weighted average number of common shares outstanding 122,170 3,628 125,798
Weighted average number of common Class C shares outstanding 154,972 154,972
Weighted average number of shares outstanding 122,170 158,600 280,770
Diluted EPS and Adjusted Diluted EPS (1)
$ - $0.57
Adjustments to Net income
Amortization $113,835
Impairment and other losses 11,395
Stock-based compensation 57,179
Deferred acquisition consideration 13,060
Gain on sale of business (94,505)
Other items, net 45,147
146,111
Adjusted tax expense (26,312)
119,799
Net income attributable to Class C shareholders 39,066
$158,865
Allocation of adjustments to Net income
Net income attributable to Stagwell Inc. common shareholders $52,712
Net income to attributable to Class C shareholders - add-backs 67,087
Net income attributable to Class C shareholders 39,066
106,153
$158,865
(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
SCHEDULE 11
STAGWELL INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
December 31, 2024 December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents $131,339 $119,737
Accounts receivable, net 716,415 697,178
Expenditures billable to clients 173,194 114,097
Other current assets 114,200 94,054
Total Current Assets 1,135,148 1,025,066
Fixed assets, net 72,706 77,825
Right-of-use assets - operating leases 219,400 254,278
Goodwill 1,554,146 1,498,815
Other intangible assets, net 836,783 818,220
Other assets 90,038 92,843
Total Assets $3,908,221 $3,767,047
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS ("RNCI"), AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $449,347 $414,980
Accrued media 245,883 291,777
Accruals and other liabilities 265,356 233,046
Advance billings 294,609 301,674
Current portion of lease liabilities - operating leases 60,195 65,899
Current portion of deferred acquisition consideration 51,906 66,953
Total Current Liabilities 1,367,296 1,374,329
Long-term debt 1,353,624 1,145,828
Long-term portion of deferred acquisition consideration 50,209 34,105
Long-term lease liabilities - operating leases 245,397 281,307
Deferred tax liabilities, net 47,239 40,509
Other liabilities 59,139 54,905
Total Liabilities 3,122,904 2,930,983
Redeemable Noncontrolling Interests 8,412 10,792
Commitments, Contingencies and Guarantees
Shareholders' Equity
Common shares - Class A & B 115 118
Common shares - Class C 2 2
Paid-in capital 343,647 348,494
Retained earnings 11,740 21,148
Accumulated other comprehensive loss (23,773) (13,067)
Stagwell Inc. Shareholders' Equity 331,731 356,695
Noncontrolling interests 445,174 468,577
Total Shareholders' Equity 776,905 825,272
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity $3,908,221 $3,767,047
SCHEDULE 12
STAGWELL INC.
UNAUDITED SUMMARY CASH FLOW DATA
(amounts in thousands)
Year Ended December 31,
2024 2023
Cash flows from operating activities:
Net income $25,044 $41,642
Adjustments to reconcile net income to cash provided by operating activities:
Stock-based compensation 52,161 57,179
Depreciation and amortization 151,652 142,831
Amortization of right-of-use lease assets and lease liability interest 75,117 76,653
Impairment and other losses 1,715 11,395
Deferred income taxes (10,686) 19,443
Adjustment to deferred acquisition consideration 23,005 13,060
Gain on sale of business - (94,505)
Other, net 7,622 8,313
Changes in working capital:
Accounts receivable 8,465 (58,704)
Expenditures billable to clients (54,350) (21,477)
Other assets (6,200) 1,153
Accounts payable 24,438 52,837
Accrued expenses and other liabilities (28,658) (24,647)
Advance billings (22,651) (41,137)
Current portion of lease liabilities - operating leases (83,905) (87,629)
Deferred acquisition related payments (19,910) (15,400)
Net cash provided by operating activities 142,859 81,007
Cash flows from investing activities:
Capital expenditures (18,912) (14,238)
Acquisitions, net of cash acquired (103,254) (23,339)
Capitalized software (35,094) (28,175)
Proceeds from sale of business, net - 229,484
Other (5,212) (7,781)
Net cash (used in) provided by investing activities (162,472) 155,951
Cash flows from financing activities:
Repayment of borrowings under revolving credit facility (1,755,000) (1,986,500)
Proceeds from borrowings under revolving credit facility 1,960,000 1,945,500
Shares repurchased and cancelled (108,249) (223,835)
Distributions to noncontrolling interests (26,723) (24,964)
Payment of deferred consideration (29,774) (49,221)
Purchase of noncontrolling interest (3,316)
Debt issuance costs - (844)
Net cash provided by (used in) financing activities 36,938 (339,864)
Effect of exchange rate changes on cash and cash equivalents (5,723) 2,054
Net increase (decrease) in cash and cash equivalents 11,602 (100,852)
Cash and cash equivalents at beginning of period 119,737 220,589
Cash and cash equivalents at end of period $131,339 $119,737
View original content to download multimedia:https://www.prnewswire.com/news-releases/stagwell-inc-nasdaq-stgw-reports-results-for-the-three-and-twelve-months-ended-december-31-2024-302387320.html
SOURCE Stagwell Inc.
